TGS Slides Most in Two Months After Revenue Outlook: Oslo Mover

TGS Nopec Geophysical ASA (TGS), Norway’s largest surveyor of underwater oil and gas fields, fell the most in more than two months in Oslo after cutting its full-year revenue guidance on lower-than-expected industry demand.

TGS slid as much as 6.5 percent, the most since April 25, and was down 5.6 percent at 180.4 kroner by 10:25 a.m., making it the biggest loser on the Bloomberg European 500 Index. (BE500) About 528,000 shares have traded so far today, more than the average daily volume in the past three months.

TGS, based in Asker near Oslo, expects to report full-year sales of $920 million to $1 billion, it said in a statement. That compares with $970 million to $1.05 billion previously.

“The main reason for the updated guidance is slightly lower anticipated investments and a reduced expected prefunding rate,” RS Platou AS analyst Thomas Oerner said by e-mail. While the broker will cut its estimates on the lower prefunding levels, “we still expect strong late sales in the second half supported by very strong late sales in the second quarter.”

Seismic companies, which use ships to search for petroleum reserves under the seabed, earn money in the multi-client market, where a surveyor builds a data library that’s then sold to explorers, and also through pre-funded surveys, where a company pays the surveyor to carry out a specific study.

Shares in the seismic surveyors have rallied since mid-2010 as oil producers operating off Africa, Norway and South America increased spending on exploration. Those gains are now at risk as oil prices fail to top $100 a barrel, squeezing profits.

TGS and Petroleum Geo-Services ASA (PGS), Norway’s second-largest seismic surveyor, have slumped more than 15 percent since the start of April amid concerns that oil and gas producers may cut exploration spending as energy prices stagnate.

TGS, due to release second-quarter results on Aug. 1, is expected to report earnings before interest, tax, depreciation and amortisation of $197.4 million, according to the average of 14 analyst estimates compiled by Bloomberg. That compares with $162.9 million in the previous quarter and $183.1 million a year earlier, according to data compiled by Bloomberg.

To contact the reporter on this story: Alastair Reed in Oslo on at areed12@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg on at cwwienberg@bloomberg.net

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